Oil stable on falling Libyan output, but bloated United States market still weighs


31 March, 2017

USA industry data on Tuesday was said to show crude inventories climbed last week, and a government report Wednesday is also forecast to show stockpiles expanded. Russian Federation undertook to slash oil production by 300,000 barrels per day starting from January 2017 compared with October 2016 or by 2.7%.

US crude oil was 10 cents lower at $49.41.

Meanwhile, Nigeria's crude oil exports are set to rise to 1.66 million bpd in May, according to a loading programme compiled by Reuters on Tuesday.

Oil prices in Thursday's session remained firm, aided by falling crude output in Libya, and slip of gasoline stocks in US; but rising USA crude inventories still worries the oil market.

The US crude oil exports averaged 520,000 barrels per day in 2016, 55,000 bpd or 12 per cent above the 2015 level, despite a year-over-year decline in domestic crude oil production, the EIA said.

Brent for May settlement was 29 cents higher at US$51.62 a barrel on the London-based ICE Futures Europe exchange.

The nation's record-high stockpile of crude oil rose by another 900,000 barrels last week, but that was more than offset by large draw downs in fuel inventories.

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A lower than expected build in USA oil inventories helped underpin oil prices, although there was still underlying caution surrounding excess United States stocks and rising production which curbed potential gains in oil.

The falls came after two days of price increases which supported Brent above $50 a barrel and lifted WTI close to that level.

Major oil traders gathered in Switzerland this week said they expected the output cuts to be extended, providing Russian Federation complies.

A survey conducted by this news agency showed that combined output by the OPEC countries reduced for three consecutive months in March and the members have now complied with almost 95% of their commitments under the output-cut deal.

Meanwhile, there is a growing sense that OPEC members and its allies must act soon to maintain the credibility of an agreement to curb output that ends in June by extending it until the end of 2017.

Along with the OPEC members, multiple non-OPEC oil exporting countries including Russian Federation also pledged to reduce their output.

The EIA is due to publish official USA crude and fuel product data later on Wednesday.

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